https://www.aar.org/keyissues/Documents/Background-Papers/Railroad-Land-Grants.pdf
The railroads have long paid their land grants but people insist that they still owe something. Freight railroads still pay property taxes which often find themselves in other modes of transport. Many railroads did not receive such grants and the grants that were received were only for transcontinental lines. It is estimated for every dollar spent on the railroads 10 dollars came back. One could argue that they were no different than the homesteaders. I think it is unfair to criticize railroads in the modern era for it especially since they paid for it.
Railroad to Freedom
Plus the land grants were paid back by the economic expansions of the areas served, by the hauling or mail and government freight at special rates that actually did not expire until the 50's.
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Unfortunately, this is not how the history is told in many high schools and colleges.
John Timm
desertdog Unfortunately, this is not how the history is told in many high schools and colleges. John Timm
Ah yes all those "free market" "robber barons" that we all had to be saved from.
No. Texas Schoolbooks rule!
ontheBNSFI think it is unfair to criticize railroads in the modern era for it especially since they paid for it.
Are there people today making such ridiculous criticisms? If so they certainly should be rebutted. However, simply issuing blanket denials, even tough they are accurate, may serve only to stir the pot. There are always people ready to criticize just about anything they have no personal stake in. But those who go around saying "Ain't it awful the railroads got all that free land" should be seen as people seeking attention for themselves.
There are many who hang on the the Conservative line that government doesn't "interfere" with business denying the fact that it always has been that way...and that the railroads stole the land instead of turning it into valuable and prosperous property. They also believe the robber barons were bad in the same breath they claim TR was for trust busting.
The linked piece by the AAR seems to be an excellent rebuttal. But it is not clear exactly who they are rebutting other than referring to them as “some rail critics.” Maybe some of those rail critics will post here and give us their side of the issue.
Perhaps the term "land grant" is a misnomer. How can it be a grant if it was given with the requirement that it be paid back? It sounds to me like it was a contract and not a grant.
BucyrusPerhaps the term "land grant" is a misnomer. How can it be a grant if it was given with the requirement that it be paid back? It sounds to me like it was a contract and not a grant.
It is sort of a grant, Bucyrus. Some railroads (mainly transcontinentals but not all of them) received grants of land both for their right of way and the checkerboard grants along the right of way. There was no specific price. However, the Federal Government required they give the Government substantial discounts both for freight and passengers doing Government business. The Government actually reaped a hugh profit from this.
By and large the railroads sold what land they could to farmers or ranchers. Their interest was really in building communities of people along their lines who would then use the railroad. However, there is a lot of land they didn't sell mainly because it was not suited to farming or ranching.
John
It sounds like the value of the land grant was not determined or stipulated. And likewise, the amount of repayment was not determined or stipulated. Nevertheless, the land was given in exchange for payment. So, I don't think it is at all accurate to call it a grant. There was a quid pro quo, which a grant, by definition, cannot have.
In addition to the payback in the form of transportation discounts for the government, it could also be argued that simply building railroads into areas prior to there being justifiable traffic in those areas would itself amount to a payback on the land grant. That too was a quid pro quo.
John WR Are there people today making such ridiculous criticisms?
Are there people today making such ridiculous criticisms?
John, I think some of us would be shocked at what passes for 'information and truth' in just about any venue or milieu you can name in modern society. I have seen numerous instances of misinformation and political opportunism being fed to learners in middle and senior high schools. My own kids brought home dreck of a kind I found sufficiently objectionable that I confronted the teacher(s) responsible. In universities these days, Marxist thinking is pervasive in the arts, and I fear it infects the classes in other faculties as well. As proof, one could conduct several pseudo-scientific polls of people populating the Occupy Movement and it should quickly become clear just how fully entrenched anti-capitalism is.
I find it ironic, and not a little immoral and hypocritical, that the people who take issue with capitalism and Big Business have no qualms about using the products of those big businesses, things like cell phones and tablets, their resident and acquired software, and the various sites they use for their social co-ordination, and most of it is shipped, upon arrival in seacans, by rail. They'll wait in line for two or more days to get the first of a kind at a big business store, those first items being the ones hurried along by the most uneconomical and least green of commercial transportation types, commercial aircraft.
Crandell
Well said, Crandell. If a person objects to the business practices, even to the point of objecting to the continuing existence of a company, the person should, in all honesty, refuse to use the products of the company.
Johnny
selectorI find it ironic, and not a little immoral and hypocritical, that the people who take issue with capitalism and Big Business have no qualms about using the products of those big businesses, things like cell phones and tablets, their resident and acquired software, and the various sites they use for their social co-ordination, and most of it is shipped, upon arrival in seacans, by rail.
Crandall,
I agree with you. But as long as these critics continue to vote with their dollars for capitalism their criticisms are a rather uncertain trumpet.
Bucyrus It sounds like the value of the land grant was not determined or stipulated. And likewise, the amount of repayment was not determined or stipulated. Nevertheless, the land was given in exchange for payment. So, I don't think it is at all accurate to call it a grant. There was a quid pro quo, which a grant, by definition, cannot have. In addition to the payback in the form of transportation discounts for the government, it could also be argued that simply building railroads into areas prior to there being justifiable traffic in those areas would itself amount to a payback on the land grant. That too was a quid pro quo.
In a word, yes. The CPR was given 20 miles on either side of their right of way across the nation in exchange for building a trans-national rail line out to British Columbia. They just about didn't make it when Sir John A. was kicked out of office and the Liberals formed the government for the next four years. The railroad stalled under the Whigs, and BC threatened to stay ouf of the Confederation. Later, Sir John A. was returned to office and he completed the line.
The rail line was needed to form a strong confederation. It was needed to keep the NP from establishing too strong a footfold in the western provinces, which MacDonald learned they were determined to do.
It should be noted that, in addtiion to the generous right of way, the CPR won an agreement from the Feds that no other railway would be permitted to build between the CPR main and the international border.
PS:
-- Edmund Burke, Reflections on the Revolution in France. Vol. iii. p. 344.
Note: The name Burke uses to describe the noise a grasshopper makes is edited out by the internet which has no awareness of context but sees it only as a slur against a group of people.
selector John WR Are there people today making such ridiculous criticisms? John, I think some of us would be shocked at what passes for 'information and truth' in just about any venue or milieu you can name in modern society. I have seen numerous instances of misinformation and political opportunism being fed to learners in middle and senior high schools. My own kids brought home dreck of a kind I found sufficiently objectionable that I confronted the teacher(s) responsible. In universities these days, Marxist thinking is pervasive in the arts, and I fear it infects the classes in other faculties as well. As proof, one could conduct several pseudo-scientific polls of people populating the Occupy Movement and it should quickly become clear just how fully entrenched anti-capitalism is. I find it ironic, and not a little immoral and hypocritical, that the people who take issue with capitalism and Big Business have no qualms about using the products of those big businesses, things like cell phones and tablets, their resident and acquired software, and the various sites they use for their social co-ordination, and most of it is shipped, upon arrival in seacans, by rail. They'll wait in line for two or more days to get the first of a kind at a big business store, those first items being the ones hurried along by the most uneconomical and least green of commercial transportation types, commercial aircraft. Crandell
In many public schools they teach you about the evils of the Robber Baron railroads who got a free lunch from the government, made are lives worse and were not regulated but at the same time being told about the greatness of the government sponsored Transcon. This time period is usually briefly covered then were told about the greatness and ingenuity of people like Ford. Ah yes those Robber Barons with their lower prices, increased quality, and higher wages they all robbed us man not saying the time period was perfect but it wasn't completely evil either. I mean that pretty much sums up what I learned in History class.
And the Pinkertons weren't hired to break strikes, either. The robber barons (not Matthew Josephson's term) may have industrialized the country but a stiff social price was paid for it.
In the mid 20th Century we learned how bad the Robber Barons were, bankers, railroaders, swindlers. We also learned that the land grants given to railroads, especially in the west, aided in building the railroads but also in allowing for people to settle there, begin ranching and farming, mineral exploration, creating towns and economies that made the place livable.
However, I have since come to the conclusion that the Robber Barons weren't all that bad...first, they were walking in new fields, moralities aside, not knowing "how far" they could go or even where they were going. They got a way with a lot, monopolies grew in natural ways as did unions and the conflicts. J.D. Rockefeller figured ways to shave wooden barrels to save cost of tare weight in shipping then changed to steel barrels for the same reason; purchased smaller kerosene manufacturers because they were producing a poorer product which would damage his clean kerosene product (he left those producing an equal product alone and absorbed the acquired company and all its employees). J.P.Morgan realized the enormity of the economy created by big business and what would happen if it went awry for some reason. Thus when one steel mill was about to go under in Youngstown, Ohio he maneuvered its being purchased piecemeal by others so that there wouldn't be a recession or depression...then he called Teddy Roosevelt and told him what he did and why and to stay out of it...TR did and all was well. And we all know how JP dealt with the suicidal construction of the Pennsylvania Central and the West Shore railroads by NYCentral and PRR interests to avoid the collapse of the two major railroads at their own hands and how he also took care of the New Haven to keep it out of bankruptcy and ruin so that all of Southern New England remained safe. So what the Barons did wrong was reprehensible in many ways, but they also did well to build American industries, business and towns and communities into a robust economy which we enjoy yet today instead of creating ghost towns by sending industry overseas. I am less quick to attack them, blame them, now than I was taught to back when and more suspect of so called investors today. But it is also important to understand their proclivities to be, in part, a learning experience and experiments in our free enterprise system.
Crandell,
Let me put in a few words for my favorite robber baron, Jay Gould. Gould got his reputation for two events: His actions in the Erie Wars and in the Gold Corner.
The Erie Wars were fought with Cornelius Vanderbilt who was far from innocent. Vanderbilt stole the New York Central Railroad from its owners. To maintain his monopoly he kept a judge on his payroll. That is judge as in New York State Superior Court Judge. The conflict began because Gould refused to join Vanderbilt's pool to fleece the public preferring honest competition instead. During the fight Gould bribed his own judge and bribed New York State Legislators but that was the only possible way to fight Vanderbilt's desire for a monopoly and Vanderbilt did exactly the same things. Even if we believe Vanderbilt was clearly in the right the upshot of the Erie Wars was that the Erie Railroad did compete with the New York Central for about a hundred years until it finally was absorbed by Conrail.
The Gold Corner was maybe started by Gould. But maybe it was started by President Ulysses Grant acting through his brother in law Abel Corwin. We will really never know because Grant never testified before the Congress and his wife Julia who accepted a "loan" -- some say it was a bribe -- from Gould never testified either. Jay Gould testified that what he wanted was to keep the price of gold high enough relative to the price of greenbacks for American farmers to sell their wheat. He did have an interest. His interest was that he was President of the Erie Railroad and the railroad shipped a lot of wheat. Grant's monetary policy of keeping the price of gold at $135 greenback dollars in the fall of 1867 threatened to wipe out profits for American wheat farmers and to do great damage to the economy to boot. Gould simply wanted the price to go to $145 or $150. A public relations problem emerged because Gould wanted to meet with Grant and explain the importance of the wheat harvest. Grant demanded a payoff for the meeting. The payoff was a free and luxurious trip from New York to New Bedford (to take a train to Boston) on one of Jim Fisk's steamboats. Reporters saw Gould and Fisk with Grant and though they had some secret influence on him. They didn't. Gould's loans to Abel Corwin, Virginia Grant Corwin (Grant's sister) and Julia Grant (Grant's wife) were disclosed in Congress. But all of the Grants were protected and never had to testify. Ulysses Grant was so corrupt that historian Charles Francis Adams coined the word "Grantism" to describe corruption.
The people who lost their shirts during the gold corner were all gold speculators who sold short trying to outsmart the market. The market outsmarted them instead.
Maury Klein is Jay Gould's biographer. Klein depicts him as a man who rationalized western railroads creating the Gould system which was a benefit to the country. Gould never built railroads but he was President of the Union Pacific and other railroads which had received land grants to aid in their construction.
Henry,
Just to add a few words to your comments.
In 1862 Abraham Lincoln was determined that we would have a transcontinental railroad and that the American people would not be taxed to pay for it. He knew and everyone agreed that without Federal aid the private sector would not build a transcontinental railroad for many years and maybe never build it at all. This was at a time when both Britain and France still had ideas of colonies in the American west. Britain already owned British North America (now Canada) and France invaded Mexico during the American Civil War.
The Federal Government provided two sources of funds. There were second mortgage bonds with interest guaranteed by the Government. All bonds were repaid in full.
The Federal Government regarded land grants as a way to get worthless land to fund the railroads. The land had no value because it was land locked. Land that cannot be reached is of no value to anyone and that was the status of the American west. To the extent that the land became valuable it was because the railroads gave it value. It now had access and could be used for an economic purpose. Also, in the checkerboard grants the U. S. Government continued to own half of all of the land. Government land which had been worthless now had value because of the arrival of the railroad. Actually, not all of the land gained value; some was so harsh that no one wanted it. But to the extent that the land did gain value it was the railroads that gave it the value.
henry6 No. Texas Schoolbooks rule!
If you don't agree with history - write your own!
Never too old to have a happy childhood!
I would only suggest that, as in many historical events, interpretations vary considerably. This is certainly true of the roles of Grant and Gould in the Gold Panic of 1869.
C&NW, CA&E, MILW, CGW and IC fan
ontheBNSF the grants that were received were only for transcontinental lines
Untrue!! The Grand Rapids & Indiana was a 'land grant' railroad.
Land grants were given to many others than just the transcontinentals and western expansion roads....New England and Southeaster roads got some as did some Grangers.
BaltACD henry6 No. Texas Schoolbooks rule! If you don't agree with history - write your own!
Thanks to Chris / CopCarSS for my avatar.
IIRC the Illinois Central was the first Land Grant railroad. Interestingly they also at one time employed an attorney by the name of Abraham Lincoln.
Murphy Siding BaltACD henry6 No. Texas Schoolbooks rule! If you don't agree with history - write your own! I've heard it said that history is written by the winners. Perhaps when there's no winners, everybody gets to write history.
Not in this case...it is slanted or weighed down by political and religious beliefs which are not generally accepted by science or historians and sxholars. Nor thinking people.
henry6grants were given to many others than just the transcontinentals and western expansion roads..
Maybe, Henry, we need to focus on the size of land grants and why the land was granted.
When I think of the "land grant railroads" I think of the ones who the Federal Government gave checkerboard grants on alternate sides of the track to.
But there were also grants from states, counties and even local municipalities. A grant could be as small as the land needed to build a station on or it could be a lot more.
So there is a great diversity in land grants.
dmoore74IIRC the Illinois Central was the first Land Grant railroad. Interestingly they also at one time employed an attorney by the name of Abraham Lincoln.
And Abe had to sue them to get his fee. He sent a bill for $3,000 but the IC would not pay. To cover the costs of the lawsuit he asked for $5,000. Ultimately the IC did pay up. When they did it was the largest fee he had ever collected.
dmoore74 IIRC the Illinois Central was the first Land Grant railroad. Interestingly they also at one time employed an attorney by the name of Abraham Lincoln.
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